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Statement by PACENation on the critical importance of competition and open markets in commercial PACE programs

PACENation is the national non-profit organization that advocates for PACE financing. PACENation provides resources and support to local governments, businesses, and non-profit organizations that are committed to allowing American property owners to improve the efficiency and resiliency of their homes and businesses with PACE.

Since our founding in 2012, PACENation has supported the development of every successful commercial PACE (C-PACE) program in the country. Working alongside committed stakeholders from the public, private and non-profit sectors, we have developed a set of best practices that we encourage states, counties, and cities to consider as they establish their C-PACE programs.

One important best practice is to maintain an open market for qualified capital providers, project developers and contractors to compete for C-PACE projects.  Programs should set reasonable minimum qualifications for capital providers and program administrators. Both the statute and program documents should not favor or disadvantage any qualified party in a C-PACE project. For C-PACE programs to thrive, PACENation believes competition is critical.

First-rate C-PACE programs depend on skilled program administration. PACENation believes program administrators and capital providers should be clear about their roles and responsibilities, often memorialized in a signed agreement.  The program administrator’s scope of work should focus on three essential functions:

a) Organize the process of drafting a program manual and guidelines;
b) Approve projects that are eligible and compliant;
c) Promote the program to stakeholders.

Capital providers should perform four key functions:

a) Originate a pipeline of projects for C-PACE financing;
b) Apply project underwriting standards consistently and efficiently;
c) Coordinate with program administrators in the approval, closing, and collection process;
d) Provide capital to fund projects at competitive rates.

The C-PACE market is at an exciting and important inflection point with several new programs emerging around the country. It is the opinion of PACENation that these programs ought to look at the lessons of the states, counties, and cities before them as they design their programs. For public acceptance and political durability, open market PACE programs are a critical component.

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